Sequoia Economic Infrastructure Income Fund (SEQI) H1 2025 earnings summary

Executive summary

• NAV per share increased from 93.77p to 95.03p, up 1.3%, driven by strong interest income and resilient portfolio performance.

• Dividend of 3.4375p per share paid, fully cash covered at 1.06x, in line with the full-year target.

• Portfolio remains highly diversified by sector and geography, with 54.8% in defensive sectors and 58.5-60% in senior secured loans.

• Share buyback programme repurchased 49.3 million shares (3.0% of share capital), supporting NAV accretion and addressing the NAV discount.

• Two out of three non-performing loans resolved, including near-full recovery on Bulb.

Financial highlights

• Total NAV return for the six-month period was 5.1% (10.2% annualized), with annualized portfolio yield-to-maturity at 9.94%.

• Earnings per share rose to 4.26p from 2.68p year-over-year.

• Dividend coverage remained at 1.06x, in line with long-term guidance.

• Ordinary share price at 80.2p, trading at a 15.6% discount to NAV.

• Net asset value at 30 September 2024 was £1,497.9 million, down from £1,524.3 million at 31 March 2024, mainly due to share buybacks.

Outlook and guidance

• Strong pipeline of £500 million in potential investments with average gross yields around 10%.

• Pull-to-par upside of 3.5p per share anticipated.

• Stable or gradually declining interest rates expected to support portfolio performance and valuation.

• Dividend expected to remain fully cash covered in the second half.

• Continued focus on ESG improvements and thematic infrastructure credit opportunities.